Converting: Moving from Transactional to Strategic HR

Human Resources should exist to help an organization attract, place, develop, grow, evaluate, reward, and retain its most valuable asset: people. However, many organizations face challenges in converting their HR department from the traditional transactional body to an office that is better equipped to meet the strategic needs of the organization.

Based on my experience as well as trends in healthcare; nonprofits; technology, research, and innovation organizations; consumer retail; entertainment; power; industrial materials and supplies; consulting firms; government groups; successful international education systems such as Singapore, Finland, and Hong Kong; and successful American K-12 education systems, it is evident that a highly effective human resource system is built to effectively and efficiently meet the needs of internal and external customers while addressing the strategic needs of the organization.

The idea of making HR a more strategic part of an organization sounds great, but actually making the shift can be very challenging. Following is a list of barriers that I have personally experienced, read about, or witnessed throughout my time as an HR change agent:

• Strategic Importance: HR has no seat at the strategic decision-making table along with other executives in finance, operations, and academics.
• Strategic Divide: A lack of understanding of the organization's strategy and HR's role, as well as an absence of a department strategy, vision, values, and measures of success.
• Customer Service Mentality: A lack of knowledge, expertise, and guidance on how to exist as customer-centric function, as well as how to ask for and utilize customer feedback.
• Human Resource Expertise: Few highly skilled HR professionals with a strong grasp of the HR body of knowledge; the ability to read and interpret research, literature, financial information, data, and metrics to improve; or business/operations acumen, which allows HR to be involved in cross-functional projects and conversations.
• Organizational Leadership and Navigation: HR departments are unable to direct initiatives and processes within the organization and gain buy-in from stakeholders.
• Caught in the Past: A belief that the purpose of the HR department is to carry out traditional or transactional operations that focus on compliance. Many times, departments with this issue are still operating through paper-based processes and maintaining paper files.
• Organizational Structure: Not organized to serve customers or make work efficient and lean.
• Internal Operating and Reporting Structure: Not even the best staff can be successful if they're overcommitted. Some HR groups are highly capable, but don't enough capacity.
• Data/Technology Gap: Lack of proper technology systems to manage, track, store, and implement programs, or the ability to use systems currently in place.
• Risk Aversion: HR departments with a history of struggles/infidelity around processes and service are usually guarded and unwilling to try new things.
• Communications Gap: Lack of resources or ability to communicate regularly with customers via Web, social media, print, or electronic means and to make processes transparent.
• Professional Connections: No connection to professional associations and professional organizations, such as the Society of Human Resource Management, American Association of School Personnel Administrators, the Urban Schools Human Capital Academy, or World at Work to gain insight, advice, and research from other professionals.

To transition to a highly effective HR system, best practices must be benchmarked and evaluated and new processes put into place. Additionally, organizations must tackle the many barriers that can stand in the way of converting an HR department. This takes time, patience, and individuals with deep knowledge and understanding of what your HR function IS and what it COULD be.

How has your organization overcome barriers to transition your HR department from transactional to strategic? What strategies did you use? How has this move impacted your organization? Please share your story in the comments section, send me an email, or write me on Twitter at @EmilyDouglasHC with details!

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